Equities succumbed to fresh bout of selling after a two-session steep upmove as investors sentiment soured on renewed macro jitters with the benchmark Nifty slipping 30 points end at 8,642.55 on the NSE.
Severe volatility in overseas markets also impacted overall trading performance on the back of mounting worries over global growth slowdown after recent weak US economic data which raised concerns that the world's largest economy could be succumbing to secular stagnation.
Wall Street's fresh record closing highs overnight even failed to boost sentiment in Asia markets.
In a sign of tepid economic conditions, country's exports shrank again in July, contracting 6.84 per cent after rising for the first time in 18 months in June due to decline in shipments of engineering goods and petroleum products.
Raising concerns about cost of credit and pick-up in economic activity, retail inflation soared to 23-month high of 6.07 per cent in July, while factory output grew at a subdued rate of 2.1 per cent in June.
Despite an early stumble reacting to disappointing maco headwinds, bourses managed to recoup some early losses towards the fag-end trade.
The benchmark Nikkei led the slide in Asian markets after the Japanese yen surged broadly to hit a five week high against the dollar even as investors turned highly cautious ahead of the FOMC minutes release on Wednesday.
European bourses are trading firmly lower after retreating from two-month high following cues from a shaky trading session in Asian counterparts.
Meanwhile, crude hit strongest levels in a month as speculation intensified over potential oil output freeze talk to support prices. During a meeting next month.
The 50-share Nifty opened a tad lower at 8,670.25 and fluctuated between a high of 8,682.35 and a low or 8,600.45 before ending at 8,642.55, showing a fall of 29.60 points, or 0.34 per cent over its last close.
The gauge had gained 80 points on Friday. Markets were yesterday on account of Independence Day.
On the sectoral front, IT indices plunged 1.16 per cent led by index heavyweight Infosys after RBS cancelled a contract to provide IT services to the bank's UK unit. It was followed by Realty (0.67 per cent) and Auto (0.62 per cent).
However, Metal jumped (1.59 per cent), PSU Bank (0.80 per cent), Pharma (0.51 per cent), Infra (0.49 per cent), Bank Nifty (0.20 per cent), Nifty Pvt Bank (0.15 per cent) and Energy (0.12 per cent).
Majar losers included HDFC, Bharti Infratel, TCS, Tata Motors, Infosys, Reliance, Sun Pharma, Bosch, Axis Bank, HCL Tech, Indusind Bank, HUL and Aurobindo Pharma.
Shares of AB Nuvo and Grasim, the two subsidiaries of Aditya Birla group remained under selling pressure following the merger decision which did not go well with investors.
Among the gainers were Adani Ports, Cipla, ICICI Bank, L&T, SBI, Hindalco, BPCL, Kotak Bank, ITC, Eicher and ONGC.
Turnover in cash segment slumped to Rs 21,571.91 crore compared to Rs 23,509.12 crore last Friday.
A total of 10,126.56 lakh shares changed hands in 87,66,476 trades. The market capitalisation of NSE stood at Rs 106,86,440 crore.
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